Western Identifiers, Eastern Practices

For Western service providers hoping to follow on the heels of the US Treasury's Office of Financial Research (OFR) and the European Central Bank (ECB) into Asia, the path is not completely clear.

The OFR and ECB, having set and issued securities identifier standards in the form of legal entity identifiers (LEIs), have to work through the G-20 (which counts Australia, China and Japan among its members) and with other Asian nations' authorities to promulgate the standard worldwide.

Identification standards have to contend with another difference between East and West, namely the use of 8-bit UTF-8 coding for characters instead of 7-bit ASCII, to render Chinese, Japanese and Korean characters, with their greater complexity than Latin-based or English characters. UTF has already been around for nearly 20 years, but Westerners seeking to enter Asian markets have to devote extra work and understanding to putting it into practice (like all great ideas, it was first devised on a placemat in a New Jersey diner, but I digress...).

Additionally, as Stuart Martin, head of pricing and reference data at Thomson Reuters, pointed out at last week's Asia-Pacific Financial Information Conference (APFIC), the languages themselves can be a challenge. Japanese, for example, must be translated into the ISO standards.

Certainly, as Mark Bands, head of global customer reference data at ANZ Institutional Bank, said at APFIC, this is one of the first times in the financial industry where such a broader collaborative approach to a regulatory or standards initiative has occurred.

So, to stretch the path analogy a bit and extend the discussion from last week's column, how well will the emissaries of Western financial regulators fare in finding their way with their Eastern counterparts? Westerners will have to convince the East of the importance of their identifier initiative, and demonstrate how implementation will work.